To think we are heading into a pensions disaster

[She11y]

I asked ChatGPT what the median pension savings were for someone in their mid 40s and I got the below reply:

Ages 35 to 44: The median pension pot is approximately £30,600.
• Ages 45 to 54: The median pension pot increases to about £81,200.

This website has a similarly sobering statistic - average pension pot for 50-59 is £96k.

https://www.nutsaboutmoney.com/pensions/average-pension-pot-uk

These are averages and the number will be brought down by some people who have zero pension savings but it's still a very low amount.

How are people going to survive retirement. There aren't many jobs for people the wrong side of 50z

Sounds like a pretty miserable existence! And totally dependent on the whims of the state and benefit cuts down the line. That state pension isn’t going to be able to maintain its value long term, it’s just not going to be economically viable. It’s 3/4 of what we spend on the whole NHS. It’s more than all other welfare combined. It’s 1.5 times the interest on our absurd public debt, 1.5 times the whole education budget, and 2.5 times what we spend on defence.

in reality, employee and employer contributions to private pensions are going to have to be ramped up significantly, triple lock removed and the state pension inflated away to subsistence level safety net only for those who didn’t make any provision for themselves during their working lives, similar to what Australia put in motion decades ago.

80% of NHS costs go on the elderly and this enormous bill for pension welfare, and this will only rise as the birth rate falls further and the population ages. It’s sucking all the money out of the economy that needs to go on education, infrastructure, technology, cheap energy generation to make our products conpetitively priced for export, support for business start ups etc, if we are to have any hope for the future.

That doesn't look right - you could buy an annuity of £24,000 with £500,000 surely or am I even worse off than I thought?

Pension ages and generous pension schemes were established at a time when most people didn't go to university, and died within a few years of retiring. Many people worked from 16 to 65, then received a pension for 3 years

Now, too many people hope to go to university, retire aged 50 and live until 80. Working from 22 to 50, then receiving a pension for 30 years. This was never going to be realistic long term

One option would be to increase pension ages far higher eg 70 plus. But I'm not sure public would vote for that

So, I have no doubt that assisted dying will be introduced, due to economic necessity dressed up as respecting autonomy. IMHO, people with limited / no savings who can't afford their own care home fees should be very concerned about this

Really - everyone I know in the private sector pays 4% which is the government minimum. Which makes over double seem a high contribution rate.

Yeah that was obvious really, sorry

I'm already at peace with working close to 'death' just not sure who will want to employ all these oldies.

I think comparatively few Gen Z’ers will be up to working (neurodiversity and anxiety) so employers may see older people more favourably.

The maximum employer contribution I've heard of was 8% and only for employees at very senior positions. Majority give 4-5% but they usually give an additional 1% to more senior/tenured employees.

The problem is is who is able to work until their 67? It’s not sustainable in many many roles, physically and mentally. People may be living longer but they certainly aren’t in good health. As a health care professional a good proportion of people we see 55+ are on their knees, I appreciate demographics play into this but certainly in normal/ less affluent areas actually making it to retirement age is an achievement. For example life expectancy in the north east is 77.

Public sector and front line workers will not be able to do the job at 67. Nurses/hcas cannot physically and mentally sustain 12 hour shifts, flat out, rolling patients, providing physical care, mentally being on the ball for complex medications etc. Teachers will be the same, police officers, Trade people, highways officers, anyone with a physically demanding job.

I don’t know the solution but upping retirement age isn’t it- all these people will end up on sickness benefits as they will not be able to do their jobs.

Big4 if they are ambitious. It provides lots of options for future career moves in business and internationally. However, they’ll need to be bright, have good interpersonal skills and a good work ethic to succeed, be prepared to put in the hours. There are opportunities for rapid promotion if you are good, but many people cannot hack it, fail exams and are booted out, or never get promoted more than one of two levels post-qualification and then leave because they don’t have quite the mix of skills needed. Choice of service area is also important, although people often transfer later.

Civil Service is a very uncertain career path at the moment, and the salaries are woeful compared to roles with similar levels of responsibility in the private sector. It can be interesting work, but it is certainly not a route to go down if seeking financial comfort. Much easier hours, certainly. Also “Civil Service” is quite broad. A specific area, of “fast stream”?

I have 3 family members who are at university studying nursing, paramedics, and social work.

They have found it very difficult to hold down a job whilst studying.
Its mainly due to placements, for the nursing student and paramedic, they are working 12 hour shifts, their shift rotation changes each week so they can’t be consistent with their working pattern with their job. The social work student is working 100 days placement, where it is 9 -5 Monday to Friday but has 2 young kids so hs to be there for them at night whilst her husband works nights and weekend and doesn’t have any childcare for the weekend.

I don’t know if it’s just the particular universities they are at, but they have found it very difficult to work.

67 is fine! People worked for 50 years and died at 68/69. Life expectancy and our health is fine at 67! We mostly aren’t dying within 2 years. We keep expecting more from the government without paying for it. We must make adjustments. Judges snd all sorts of self employed people work at 70 plus. Their brains haven’t addled.

Exactly- even with flights home it would be much cheaper to live abroad. Also have some sunshine!

Yes please 🌞

Dh gets 10% on top of his salary. He is assistant vp grade which isn't very high. They pay it when he is on sick leave and paternity leave too.

I think that’s a bit unfair and silly. How old are you now? Things have changed. Independent living costs more.

I was also independent and living alone at 16 (in the early 2000s) but 1) it wasn’t fun; and 2) there’s absolutely no chance a 16 year old could do that now. For a start, there are far fewer dodgy landlords now who would take the risk of renting you a flat when you’re too young to sign a tenancy agreement, even if you somehow could afford it with the cost of living as it is now. It’s not comparable.

I agree kids that age can do some work and earn some money as well as studying, but it’s unrealistic to compare back to then when living costs are now unaffordable even for many people with established careers. It’s also totally understandable that people don’t want their children coming out of university £50k+ in debt and paying a 9% extra tax, in effect, throughout working life, lowering their net income drastically and therefore making it less likely they can buy a home. Taxes are high enough already.

There is also an expectation that parents fund a substantial amount of their children’s university costs: it is factored into the student loans available to them, the amount of which is determined based on parental income. Parents are left with little choice but to contribute or their child would really struggle.

I’m in a fortunate position that I hope I’ll be able to continue pensiom contributions and help my children through studies, and retire around the time they finish university, but not everyone is, and it’s completely normal to prioritise your children’s needs over your own of you have to choose between them. What else would be the point in raising a family and working hard in the first place, if not to set up the next generation and give them the best life that you can?

I know. That 68 and counting is difficult, so I need to figure out what allows me to be gone before then.

May our plans come together🤞🏾.

This is so true. When I had a public sector role my salary was around 50k but the pension benefits made this 75k in real-terms. It's unmatchable.

Because….?

I hear this comment often and yet when I have enquired as to what needs to be looked at, I hear nothing but Daily Mail sound bites and little of actual substance.

I work in the private sector and interact with a public sector body. The people I deal with are incredibly intelligent, knowledgeable and committed to their work. In the private sector they could more than double their salary - and receive a very generous pension and other benefits. Believe me, the public sector are not providing a golden handcuff pension that couldn’t be achieved elsewhere. They do the job because they believe in the work and making a difference. We, as a country and society, would be far worse off without these people.

@TheCastleDoesNotReply
The grad tax is not 9% on all earnings. If you don’t earn above the threshold it’s 0%. Above the threshold you pay. It’s completely earnings based. Therefore choosing the best university and course to earn well matters. This way you do earn more than those who haven’t been to university. The gap is closing though and around 20% of students don’t get a graduate job. Therefore their parents may well question why they stumped up the money for student rents and food. The loan for many is well short of what’s needed.

As a result we need a big rethink on post 18 education. That 20% need apprenticeships with day release. We need them employed paying tax and into pensions. Everyone would be better off.

Best of luck to you too!
I am trying to keep DH healthy. Organs are always valuable😂 joking

Except that it will NOT be 68 for us around 40.
That's what we moan about. We will have very little chance of enjoying 20+ years of retirement if going by state pension like my GPs did or my mum will🤞. Most of my family dies before 85. I think that's our grnetical upper limit imho.
Worked since 15 part time jobs (20 hours), so that makes what to 68, 53 years. Pension age can and will be most likely revised every 5 years. If they add a year each time, then I am just going to roll off from work to a coffin basically.
And "We keep expecting more from the government without paying for it.".
Weare paying for it. More and more. It's not us who is the problem. It disorganised spending of government on failed projects etc. That's a case in many countries.

@SparrowsEatUpToHalfTheirBodyWeightADay. why do you demand 20 years? Years ago many had 2. You need to keep fit and accept you cannot keep getting more money from smaller workforce. It’s impossible. The state owes £trillions in pensions. If you want it, you will need to work to pay for it.

We will have very little chance of enjoying 20+ years of retirement if going by state pension like my GPs did or my mum will🤞

I also agree that not all jobs are created equal in terms of who can work into retirement.

I work in health care and very few people make it to actual retirement age. Both physically demanding roles but my role isn't, it's the mental draining side of it. Most of are staff on older pensions who partially retire and significantly drop their hours on the run up. Mostly they end up dropping out due to fatigue

The reality is that there's lots of jobs that are unlikely to see people through to retirement age. My wife works in a physical job that no one has also lasted to retirement age in. Even things like shop work increasingly have more physical demand eg. Rare to find a shop role now days that isn't predominantly on your feet as checkout roles have changed

There's a reason why things like the police traditionally had lower retirement ages